Stamp Duty

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Stamp Duty

 

Q: When should a document be stamped?

 

Ans: All documents that are to be executed in India should be stamped before or at the time of execution.

 

Q: Can the Stamp Duty already paid be refunded if the transaction outlined in the contract fails?

 

Ans: No, there is not any such provision.

 

Q: Are there any provision of refund of stamp duty?

 

Ans: Yes, as per the provisions of section 49, 50, 52, 53 and 54, Stamp Duty can be refunded under the following circumstances:

 

  1. Spoiled Stamps
  2. Misused Stamps
  3. Stamps used in excess of the value required.
  4. Stamps not required for use.

 

Q: Who bears the legal liability to pay stamp duty in the following conditions:

 

  1. Sale
  2. Exchange
  3. Lease
  4. Partition of property

 

Ans: The following persons bear the responsibility:

 

  1. Sale - Purchaser
  2. Exchange - Both the parties
  3. Lease - Lessee
  4. Partition - Both parties, in proportion to their respective shares

 

Generally speaking, the duty is generally payable by executant of document.

 

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Q: What types of stamp duty are available?

 

Basically, two types of stamps are available depending upon the purpose of usage:

 

  1. Judicial Stamps - Stamps used for payment of court fees.
  2. Non-Judicial Stamps - Stamps used for payment of duty on documents. These can be further of two types:
  1. Impressed Stamps
  2. Adhesive Stamps

 

Q: What is the purpose of Indian Stamp Act?

 

Ans: The purpose of enacting such an act is to raise revenue for the local governments. Additionally, payment of stamp duty imparts legality to the document and this can be submitted as an authentic document in courts.

 

Q: Which instruments attract stamp duty?

 

Ans: The following list of instruments attracts stamp duty:

 

  1. Affidavit
  2. Lease
  3. Memorandum and articles of company
  4. Bill of Exchange
  5. Bond
  6. Mortgage
  7. Conveyance
  8. Receipt
  9. Debenture
  10. Share
  11. Insurance Policy
  12. Partnership Deed
  13. Shares, etc.

 

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Q: How is stamp duty paid in transactions where more than one instrument is required?

 

Ans: In such a case, stamp duty is paid only on one instrument.

 

Q: Can stamp duty be paid in India, for documents executed outside India?

 

Ans:Yes, instruments executed out of India can be stamped in India, provided they are stamped within 3 months of the date they were received in India.

 

Q: "Stamp Duty is paid on ad-valorem basis". What does this implies?

 

Ans: It means that - "Stamp Duty" is paid on basis of value of property.

 

Q: How is stamp duty payable determined?

 

Ans: Usually, the executor himself determines the stamp duty payable on document, but, the Collector of the area can be contacted for the purpose.

 

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Q: Is there any remedy available for under paid documents?

 

Ans: Yes, in such an incidence, the executor may contact the concerned official within 1 year of the initial date of payment of stamp duty.

 

Q: What is meant by Stamp Duty?

 

Ans: Stamp duty is a kind of tax levied on documents.

 

Q: What are the documents on which Central Government levies stamp duty?

 

Ans: Central Government can only levy stamp duty in respect of the instruments: Bill of exchange Cheques Promissory Note Bill of landing Letter of Credit Policy of Insurance Transfer of Shares Debenture Receipt

 

Q: How and where to pay stamp duty?

 

Ans: Stamp duty can be paid through a) Purchase of impressed stamps from treasury or licensed stamp vendors OR b) Purchase of adhesive stamps OR c) Payment to the Government through DD / pay order issued by any nationalised bank / scheduled bank or challan. OR d) Instrument (document) can be written on plain paper and stamp duty can be paid through DD / pay order issued by any nationalised bank / scheduled bank or challan within two months from the date of execution of the instrument (document) and get it Certified by the jurisdictional District Registrar or Sub Registrar.

 

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Q: Can a Stamp paper used for one purpose be used for another transaction?

 

Ans: No. A stamp paper once used for a purpose cannot be used for another purpose. Example: An affidavit executed for a purpose cannot be executed for another purpose.

 

Q: When Stamp duty is to be paid?

 

Ans: (a) Generally stamp duty shall be paid or before or at the date of executing a document. (b) Instrument (document) can be written on plain paper and stamp duty can be paid through DD / pay order issued by any nationalised bank / scheduled bank or challan within two months from the date of execution of the instrument (document) and get it Certified by the jurisdictional District Registrar or Sub Registrar.

 

Q: How to pay stamp duty in respect of a document executed out of India? What is the procedure to be followed?

 

Ans: Stamp duty can be paid within three months from the date of receipt in India. Document may be produced before the District Registrar, who will certify on the payment.

 

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Q: Is it mandatory to pay stamp duty on interest to be accrued on the loan irrespective of documents executed as security for such loan?

 

Ans: No. Stamp duty is to be paid on loan amount. No duty need be paid on interest to be accrued.

 

Q: Is there deduction of stamp duty in respect of sale deed relating to property executed in favour of mortgage of the same property?

 

Ans: Yes. Deduction to the extent of duty paid on mortgage deed is available.

 

Q: What is the stamp duty to be paid in respect of instruments in which amount is to be paid in annuity or periodically?

 

Ans: Instruments executed to pay amount annually or periodically stamp duty is to be paid as follows depending on the circumstances. Where the sum payable during the period is previously ascertained stamp duty is to be paid on whole of the amount. Where the sum payable is in perpetuity or for an indefinite time not terminable with any life, stamp duty shall be on the sum payable during the period of 20 years calculated from the date on which the first payment becomes due. Where the sum payable for an indefinite time terminable with any life, the stamp duty shall be paid on the sum payable during the period of 12 years calculated from the date on which the first payment becomes due.

 

Q: Generally there are 2 parties in a document i.e. executing party and claiming party. Who is liable to pay stamp duty among them?

 

Ans: In the absence of agreement to the contrary, the expense of providing the proper stamp shall be borne- In the case of mortgage by way of deposit of deed, hypothecation, further charge, indemnity bond, bond, mortgage, settle by the person drawing making or executing such instrument; In case of conveyance (sale etc.) deed including reconveyance by the grantee, Example: in case of sale deed purchaser is liable to pay stamp duty. In case of lease lessee, In case of power of attorney executing party, In case of Certificate of sale on auction of property the purchaser, In case of exchange deed both parties equally, In case of partition deed, all the parties in proportion to their share are liable to pay stamp duty

 

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Q: Is there any provision to get authentic opinion on the duty payable on any document is doubtful? If there is provision, what is the procedure to be followed?

 

Ans: In case of doubt about duty payable on any instrument (document) application may be made to the District Registrar (Deputy Commissioner of Stamps) with following records: Draft of the proposed deed or deed itself. Affidavit (on stamp paper of Rs.20) Fee Rs.100.

 

Q: What is the consequence of non-payment of stamp duty?

 

Ans: When Stamp duty leviable on a document is not paid i.e. cannot be accepted or received in evidence. No transaction is valid if done on the basis instrument no duty stamped. Instruments presented to any public officer (excluding police) will be impounded. Stamp duty an penalty will be levied.

 

Q: What is the procedure followed after a document is impounded?

 

Ans: (a) A public officer impounding an instrument will send it to Deputy Commissioner (District Registrar) concerned to determine the stamp duty to be paid. Deputy Commissioner (District Registrar) will determine the stamp duty to be paid after giving opportunity to the party concerned to put forth these arguments on the duty to be paid. He may levy penalty of minimum of Rs.5 or up to ten times of the deficit total duty to be paid depending on the case if he finds the document was not duly stamped. Appeal can be preferred to the chief controlling Revenue Authority (Inspector General & Commissioner of Stamps) in first instance and then to the High Court if the parties are aggrieved.

 

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Q: Is there provision to write document in available stamp paper and pay deficit stamp duty afterwards in urgent cases?

 

Ans: Yes there is provision. If the party concerned voluntarily come forward to pay deficit stamp duty within one year from the date of execution (signature) Sub Registrar will accept deficit stamp duty and certify accordingly on the document without leaving penalty.

 

Q: Is there provision to get refund of penalty paid in case of impounded Document?

 

Ans: Yes, there is provision. Chief Controlling Revenue Authority (IGR & CS) nay order refund on appeal within one year.

 

Q: Is there time limit to use the stamps purchased?

 

Ans: No, there is no time limit. They may be used anytime.

 

Q: Is there concession of stamp duty if property is leased to family members?

 

Ans: Yes. There is concession. If lessee in relation to lesser is husband, wife, father, mother, son, daughter, brother, sister, maximum stamp duty payable is Rs.1000. If it is lease is in perpetuity, additional stamp duty for local bodies shall be paid.

 

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Q: Is there is concession for sale deeds in favour of Educational Institutions for their building etc.?

 

Ans: There is concession of stamp duty to the extent of 25 percent. There is no concession of registration fee.

 

Q: Is there concession of stamp duty for mortgage deeds executed by Central Government Employees to obtain loans for house building/repair advance? If so what is the extent of concession?

 

Ans: There is 50 percent concession of the stamp duty to be paid to the Government and 50 percent registration fee.

 

Q: Is there concession for the mortgage deeds executed by State Government Employees to obtain loans for house building/repair advance? If so what is the extent of concession?

 

Ans: There is cent percent assumption on stamp duty. Registration fee Rs.100/- only.

 

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Q: Is there concession of stamp duty in relation to schedule caste and schedule tribes? If so, what is the extent?

 

Ans: Full stamp duty and registration fee are exempted for sale deeds of immovable property executed in favour of beneficiaries belonging to scheduled caste and scheduled tribes, with the help of Scheduled Caste and Scheduled Tribes Development Corporation, on production of Certificate issued by the competent authority. Stamp duty is levied only on consideration instead of market value in respect of sale deeds executed by Municipal Corporations and Municipalities. There is 50 percent exemption of stamp duty in respect of instruments executed by person belonging to scheduled caste and scheduled tribes in connection with direct loan scheme of Karnataka Schedule Caste and Schedule Tribes Development Corporation. There is no exemption of registration fee.

 

Q: What is stamp duty payable in respect of lease-cum-sale deeds of site, flat, apartments executed by House Building Co-operative Societies?

 

Ans: Stamp duty on security deposit is levied in respect of lease cum sale deeds. In respect of sale deeds executed by the House Building Co-operative Societies, in pursuance of lease-cum-sale deeds, deduction of stamp duty will be given to the extent of stamp duty already paid on lease-cum-sale agreement explained in Para a., above. Additional stamp duty towards infrastructure development corporation at 5 percent on the stamp duty and additional stamp duty towards local bodies shall be paid in addition to the duty payable to Government

 

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Q: Under whose name the stamp paper is to be purchased and who pays the stamp duty during a transaction of buying and selling?

 

Ans: The stamp paper is generally purchased in the name of the executor to the agreement. Generally, the buyer pays the Stamp duty unless agreed otherwise.

 

Q: Is Stamp Duty payable on transfer of flat from husband to wife or children and vice-versa?

 

Ans: Yes. Stamp Duty will be same as applicable to conveyance. However 10% rebate could be expected while valuation, at the discretion of valuation officer.

 

Q: Is there any way where the value of the stamp duty could be reduced for flats?

 

Ans: The deductions which can be requested are:

 

  1. Up to 50% of market value in case of buildings which are 40 years old. (In practice only 30% of the deduction is given). One can also ask for such deductions (in proportion) if the building is little less older than 40 years.
  2. Non-road facing
  3. Fourth floor upwards and without lift.
  4. Slum land or Kardi land

 

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Q: What is the Stamp Duty payable in case of exchange of properties?

 

Ans: Stamp Duty is payable only on the value of that property, whose value is maximum among the two properties exchanged.

 

Q: What is Stamp Duty?

 

Ans: It is a type of tax collected by the government. It is payable on instruments and not on transaction. Instruments include every document by which any right or liability is or purports to be created, transferred, limited, extended, extinguished or recorded but does not include a bill of exchange, cheque, promissory note, bill of exchange, bill of lading, letter of credit, policy of insurance, transfer of shares, debentures proxy and receipt.

 

Q: Who is liable to pay stamp duty?

 

Ans: Generally, the purchaser is liable to pay stamp duty. But if there is any contract to the contrary then the stamp duty will be paid according to the terms of the contract e.g. if there is a contract stating that the stamp duty will be paid by the seller or it will be divided equally then the stamp duty will be paid as per the terms of his contract.

 

Q: Why Stamp Duty should be paid?

 

Ans: Stamp Duty paid instrument / document is considered proper and legal instrument / document and as such gets evidentiary value and is admitted as evidence in courts. The instruments / documents not properly stamped are not admitted in evidence by the court. Instruments include every document by which any right or liability is or purports to be created, transferred, limited, extended, extinguished or recorded but does not include a bill of exchange, cheque, promissory note, bill of exchange, bill of lading, letter of credit, policy of insurance, transfer of shares, debentures proxy and receipt.

 

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Q: On what value is the stamp duty payable?

 

Ans: The Stamp duty is ascertained on the market value of the property as ascertained by the stamp duty authorities. The consideration or price mentioned in the document is not relevant. The parties entering into the document will have to apply for adjudication of stamp duty. The stamp authority will ascertain the stamp duty on the basis of the market value of the property. This value is recognized on the basis of a ''Ready Recknor'', which gives the per sq. mtr. value of each zone at the concerned Sub-Registrar office. But the ready-recknor is not conclusive and it is merely a guideline for the stamp authority. The market value of the flat will depend on the location / area / locality, the amenities available etc.

 

Q: What are the consequences of delay in Stamp Duty?

 

Ans: If the stamp duty is not paid on time it attracts penalty at the rate of 2% per month of the stamp duty that has to be paid. But it cannot exceed twice the amount of the stamp duty that has to be paid. Besides the penalty amount the defaulter will have to pay the amount of the stamp duty.

 

Q. What is meant by the market value of the property and whether Stamp Duty is payable on the market value of the property or on consideration as stated in the agreement?

 

Ans: The market value means the price at which a property could be bought in the open market on the date of execution of such instrument. The Stamp Duty is payable on the agreement value of the property or the ready reckoner(a government published guide on property rates in all areas) value which ever is higher.

 

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